It is a sort of private phobia shared my myself and someone who was also present during what seemed like centuries (but was in fact only decades) of students with extremely small vocabularies parading in and out of our humble private institution (of learning, that is), saying...

A person of the Kingdom of the Net, who calls himself Red Tornado, summarizes the troubled matter of "awful" vs. "awesome" as follows:

"Awful and awesome share the same root word, awe. At one time they meant essentially the same thing, 'full of awe, profoundly reverential'. Awe first appears in its Old English form in a ninth century manuscript. At that time, it meant 'immediate and active fear, terror, dread'. This terror and fear were typically inspired by God. Soon, the meaning passed gradually into 'dread mingled with veneration, reverential or respectful fear'. The word has had a whole other career as a verb, basically instilling the emotions which the noun described and, really, following the changes in meanings, too. Shakespeare uses awe twenty times, and sometimes his sense of the word seems surprisingly modern. In The Merry Wives of Windsor, for example, Falstaff, speaking of Ford, says: 'I will awe him with my / cudgel: it shall hang like a meteor o'er the / cuckold's horns.'

"Awful is a much older word than awesome and came into use at more or less the same time as awe. It first appeared in written English in 885 and simply meant 'awe-inspiring', something, or someone, who inspired fear or dread. By the 17th century, though, awful also had the meaning of 'sublimely majestic'--clearly the opposite of what it means today. (Awesome didn't appear on the scene until the late 16th century.)

"Today, the first meaning of awful--in most American dictionaries, at least--is 'extremely bad, unpleasant'. We can thank America for that. The Dictionary of American English on Historical Principles declares awful an Americanism and traces its first appearance in print to 1809. John Pickering, in his 1816 Vocabulary, or, Collection of Words and Phrases Which Have Been Supposed to Be Peculiar to the United States, wrote: 'In New England, many people would call a disagreeable medicine awful, or an ugly woman an awful-looking woman.' The Random House Dictionary of American Slang has an even earlier citation, from American Poems, published in 1786: 'Adam's wife destroyed his life/In a manner that is awful.'

"The contemporary definition for awesome is, simply, 'inspiring awe'. However, I would bet my bottom dollar that most Americans use the word in its slang sense, 'very impressive'. This meaning of the word is omnipresent and any kid over the age of six probably uses it at least ten times a day, usually in the form of 'awesome, dude.' The changing usage of awesome and awful has inspired ire and dismay, and has done so for a while now. A certain Robert Utter, in a 1916 book Everyday Words and Their Uses, fairly rants: 'Awful does not mean ugly or disagreeable.'"